Pallas Foods records pre-tax loss of €24.1m due to impact of pandemic

Limerick-headquartered food distribution company Pallas Foods last year recorded a pre-tax loss of €24.1 million as the business grappled with the impact of Covid-19.

Accounts show that revenues at Pallas Foods Unlimited fell 15 per cent to €326.4 million in the 12 months to the end of June 2020.

The Covid-19 pandemic impacted on operations towards the end of the company’s third quarter and across the fourth quarter of the business’s financial year.

However, a large proportion of the pre-tax loss arose from a non-cash impairment charge of €15.5 million. The charge arose from the transfer of the company's Northern Ireland trade to Sysco Foods NI Ltd on June 27th, 2020.

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The directors stated that Covid-19 “has impacted the results for the current period as a number of our customers were closed for a significant period of time. This has resulted in a decrease in revenue.”

They said that the business “is working to keep their existing customer base and looking to new markets and customers”.

The business serves the restaurant and hotel sector that has been severely hit by Covid due to Government closures, reducing demand for its products.

After the onset of the Covid-19 crisis, the company “took action to ensure liquidity, reduce variable and structural costs and pivot the business to maximise sales during a period of disruption”.

Restructuring

In 2009 the New York Stock Exchange-listed Sysco Corporation purchased the business in a deal valued at €200 million at the time.

The directors state that post-year end, the company implemented a restructuring plan to align its business following the transfer of the North Ireland trade to Sysco Foods NI Ltd.

Numbers employed at Pallas Foods last year increased from 1,202 to 1,281 as salary costs declined from €43.66 million to €34 million. Redundancy costs totalled €1.1 million.

The company’s balance sheet remained strong at the end of last June with shareholder funds of €94.19 million. This included accumulated profits of €50.4 million.

Its cash funds reduced from €20.78 million to €12.5 million as the value of financial assets reduced from €34.6 million to €31.3 million.